The City of Seattle recently passed a Commuter Benefits Ordinance that takes effect in 2020. The ordinance is similar to other commuter benefits ordinances that we have seen in the Bay Area, New York City, and Washington D.C.
Employers Subject to the Seattle Commuter Benefits Ordinance: 20+ Employees
Effective January 1, 2020, the Seattle Commuter Benefits Ordinance applies to employers who employ 20 or more employees worldwide.
Government entities and tax-exempt organizations are exempt from the provisions of this law.
Covered employers are required to allow covered employees to make a monthly §132 pre-tax payroll deduction for transit or vanpool expenses within 60 days of commencing employment.
Covered employees must have the option to elect up to the §132 pre-tax limit for transit or vanpool expenses ($265/month in 2019).
Seattle Office of Labor Standards guidance suggests that there will be a future rulemaking permitting employer subsidies as a manner of satisfying the Ordinance. See our previous post for more details on employer commuter benefit subsidies: http://abd-live.test/blog/employer-commuter-benefit-subsidies/.
How Does an Employer Determine if it Meets the 20+ Employee Threshold?
The number of employees for the current calendar year is based on an average number of worldwide employees in the previous calendar year who worked for compensation. This includes employees of all employment statuses (full-time, part-time, seasonal, temporary, outside staffing firm, etc.).
If an employer did not have any employees in the previous calendar year, they would look at the average number of employees during the first 90 days of the current calendar year.
Covered Employees: 10 Hours Per Week
A covered employee is an employee who worked an average of 10 or more hours per week in Seattle in the previous calendar month.
Covered employees include those who telecommute, occasionally work in Seattle, and live outside Seattle as long as they work an average of 10 hours per week in Seattle.
Effective January 1, 2020, an employer must display a poster in English and in the primary languages of the employees at the workplace that they have the right to make pre-tax deductions for transit and vanpool expenses.
The Office of Labor Standards will create this poster and make it available in late 2019. It is likely that this will also be incorporated into the existing Labor Standards Workplace Poster.
Penalties of up to $500 may be assessed for a first violation. Subsequent violations may result in penalties of up to $500 per aggrieved party.
Although employers are required to comply beginning January 1, 2020, the Office of Labor Standards has stated it will not take enforcement action until January 1, 2021. Even after enforcement begins in 2021, OLS may provide employers with a 90-day voluntary “cure” period during which the employer has an opportunity to comply without penalty or other enforcement activity.
Where are More Materials on the Seattle Commuter Benefits Program?
Office of Labor Standards Website has links to a short summary PDF and FAQs
Disclaimer: The intent of this analysis is to provide the recipient with general information regarding the status of, and/or potential concerns related to, the recipient’s current employee benefits issues. This analysis does not necessarily fully address the recipient’s specific issue, and it should not be construed as, nor is it intended to provide, legal advice. Furthermore, this message does not establish an attorney-client relationship. Questions regarding specific issues should be addressed to the person(s) who provide legal advice to the recipient regarding employee benefits issues (e.g., the recipient’s general counsel or an attorney hired by the recipient who specializes in employee benefits law).